| Schedule of Fair Value of Consideration Transferred |
The estimated Acquisition Date fair value of the consideration transferred totaled $53.5 million, which consisted of the following (dollar amounts in thousands): | | | | | Cash (1) | $ | 29,073 |
| Contingent consideration | 3,800 |
| Fair value of previously held membership interests | 20,608 |
| Total consideration transferred | $ | 53,481 |
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| | (1) | Includes $16.3 million paid to Donlon Family LLC and reflects a post-closing working capital adjustment of $20 thousand delivered to the sellers of RiverBanc on July 15, 2016. |
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| Schedule of Recognized Identified Assets Acquired and Liabilities Assumed |
The following table summarizes the estimated fair values of the assets and liabilities of Riverchase Landing and The Clusters at the Changeover Date (dollar amounts in thousands). The estimated fair values shown below are provisional measurements that are based upon preliminary financial information provided by Riverchase Landing and The Clusters and are subject to change. | | | | | Cash | $ | 112 |
| Operating real estate (1) | 62,322 |
| Lease intangibles (1) | 5,340 |
| Receivables and other assets | 2,260 |
| Total assets | 70,034 |
| | | Mortgages payable | 51,570 |
| Accrued expenses and other liabilities | 1,519 |
| Total liabilities | 53,089 |
| | | Non-controlling interest (2) | 4,462 |
| Net assets consolidated | $ | 12,483 |
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| | (1) | Reclassified to real estate held for sale in consolidated variable interest entities on the consolidated balance sheets (see Note 11). |
| | (2) | Represents third party ownership of membership interests in Riverchase Landing and The Clusters. The fair value of the non-controlling interests in Riverchase Landing and The Clusters, both private companies, was estimated using assumptions for the timing and amount of expected future cash flows from the underlying multi-family apartment communities and a discount rate. |
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed by the Company at the Acquisition Date (dollar amounts in thousands). The membership interest purchase agreement for the acquisition of RiverBanc included a post-closing working capital adjustment that was calculated at $20 thousand and settled with the sellers of RiverBanc on July 15, 2016. Additionally, the excess severance holdback amount described above was settled with the sellers of RiverBanc on July 15, 2016. The Company engaged a third party for valuations of certain intangible assets. | | | | | Cash | $ | 4,325 |
| Investment in unconsolidated entities | 52,176 |
| Preferred equity and mezzanine loan investments | 23,638 |
| Real estate under development (1) | 14,922 |
| Receivables and other assets | 911 |
| Intangible assets (1) | 3,490 |
| Total identifiable assets acquired | 99,462 |
| | | Construction loan payable (2) | 8,499 |
| Accrued expenses and other liabilities | 2,864 |
| Total liabilities assumed | 11,363 |
| | | Preferred equity (3) | 56,697 |
| | | Net identifiable assets acquired | 31,402 |
| | | Goodwill (4) | 25,222 |
| Gain on bargain purchase (5) | (65 | ) | Non-controlling interest (6) | (3,078 | ) | Net assets acquired | $ | 53,481 |
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| | (1) | Included in receivables and other assets on the consolidated balance sheets. |
| | (2) | Construction loan payable to the Company is eliminated on the consolidated balance sheets. |
| | (3) | Includes $40.4 million of preferred equity owned by the Company that is eliminated on the consolidated balance sheets. Remaining $16.3 million of preferred equity owned by third parties was redeemed on June 10, 2016 and June 24, 2016. |
| | (4) | Goodwill recognized in the acquisition of RiverBanc. |
| | (5) | Gain on bargain purchase recognized in the acquisitions of RBMI and RBDHC in the year ended December 31, 2016. |
| | (6) | Represents third-party ownership of KRVI membership interests (see Note 10). The Company consolidates its investment in KRVI. The third-party ownership in KRVI is represented in the consolidated financial statements and the pro forma net income attributable to the Company's common stockholders as non-controlling interests. The fair value of the non-controlling interests in KRVI was estimated to be $3.1 million. The fair value of the non-controlling interests in KRVI, a private company, was estimated using assumptions for the timing and amount of expected future cash flow for income and realization events for the underlying real estate. |
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| Pro Forma Information |
The following represents the pro forma consolidated revenue and net income attributable to the Company's common stockholders as if the Acquirees had been included in the consolidated results of the Company for the years ended December 31, 2016 and 2015, respectively (dollar amounts in thousands): | | | | | | | | | | Years Ended December 31, | | 2016 | | 2015 | Revenue | $ | 356,138 |
| | $ | 390,576 |
| Net income attributable to Company's common stockholders | $ | 51,782 |
| | $ | 72,707 |
| | | | | Basic pro forma earnings per share | $ | 0.47 |
| | $ | 0.67 |
| Diluted pro forma earnings per share | $ | 0.47 |
| | $ | 0.67 |
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